Love & Money: Divorce Insurance? Really?

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It’s a part of life–many marriages end in divorce. And often one of the former spouses is left in dire financial straits in the aftermath. This is especially true for women, who can expect a decline in household income of about 37%.

One company, North Carolina-based SafeGuard Guaranty Corp., has a solution: divorce insurance. Â The corporation, who partnered with Prime Insurance Co., claims to be the first in the world to offer divorce insurance. The product has been named WedLock and is meant to decrease the costs associated with divorce, such as legal fees. In order to avoid fraud, the company has a four-year waiting period before a claim can be made.

Coverage is sold through “units of protection,” that cost $15.99 per month. The Website describes divorce insurance as “an annually renewable, premium guaranteed form of casualty insurance that provides a lump sum of cash (based on initial claim value units of $1,200 per unit purchased up to $250,000) that is paid if your marriage ends in divorce.” Each unit increases in value by $250 each year after the policy’s maturity period ends and the premium stays fixed.

Why not just put $15.99 in a savings account each month instead of purchasing divorce insurance? Well, the folks at WedLock have already answered that question. They assert that most people don’t have the discipline to save on a regular basis. They also argue that if you live in a community property state, the money you’ve saved up could be split between you and your former spouse.

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If we stop jumping into marriage without the benefit of knowing what a marriage is and recognizing that it is a 24/7…365 relationship that we must work to maintain, then divorce insurance would be a far off option.

Wendy Smith

Are you kidding me? What has this world come to? In my small mind, insurance should be a community in helping each other, not a gamble or a just in case. Come on, in this crazy world, let’s remember to get our focus straight! We need to teach that marriage is forever, and this is coming from someone who has been divorced. We are so spoiled to think that if things are not going well to abandon ship, how does this build character?…and then to rely on insurance to help us through. Not buying it. Get over corporate and come back to community…Corporate is putting your money on gamble and not trust that those who love you will help out.

Kim

Everybody is finding ways to make a buck and this is latest way, but unfortunately this insurance will take off because more and more divorces are happening each and every day and people will take advantage of this insurance.

Great information in your posting, I saw a report on television last week about this same thing and since I am getting married in five weeks and the timing couldn’t have been better! thnks for the post!